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Jon B. Lovelace, who led American Funds group, dies at 84

Jon B. Lovelace, long-time head of the Los Angeles-based American Funds mutual fund company, has died. He was 84.

His family said Lovelace died of natural causes at his home in Santa Barbara on Wednesday.

Lovelace is credited with some of the key innovations that helped set the stage for American Funds' explosive growth from the 1980s through the mid-2000s, as it became synonymous with successful buy-and-hold stock investing.

The funds' parent firm, Capital Group Cos., now manages about $1.2 trillion in all, most of that in 33 mutual funds owned by tens of millions of Americans. The company’s huge flagship funds include Growth Fund of America and Investment Co. of America.

Lovelace also nurtured an egalitarian environment at Capital, the polar opposite of the authoritarian regimes of many Wall Street firms.

His daughter, Carey, once referred to him as a “Buddhist businessman” who disdained hierarchy and personal aggrandizement.

Although Lovelace ultimately held the title of chairman of Capital's fund business until he retired in 2005, “he liked the symbolism of not having titles,” said Paul Haaga Jr., a Capital executive who joined the firm in 1985. “He led quietly, and he led through influence.”

In 1958, Lovelace launched a new approach to mutual fund management: Rather than having a single individual manage a portfolio, Lovelace created a “multiple counselor” system, whereby four or more managers would independently run slices of a fund.

It fit with Lovelace's dislike of the traditional Wall Street “star” system. “Because of the nature of our structure, we're not highly dependent on one person as some organizations are,” Lovelace told The Times in 1990.

The multiple-counselor system produced powerful long-term investment returns on many of American's stock funds, which in turn made the company a favorite of brokerages eager to sell winning products.